The two clubs officially agreed to a Memorandum of Understanding (MOU) on Tuesday, which would see Wollongong become a feeder club to the Sky Blues. 

The announcement comes little more than a fortnight after the Wolves signed a similar deal with A-League expansion hopefuls Canberra. Southern and Canberra make up part of the remaining six bids fighting for inclusion into the national competition, with a decision expected on December 12. 

Southern are determined to make the Illawarra their own alongside the St George and Sutherland regions. 

The Chinese-backed entity already have an agreement in place with Football South Coast with the aim of boosting youth pathways in the region.

However, they have been continually snubbed by the Wolves despite hoping to build a positive relationship with the National Premier League club. Wollongong have remained staunch in their ambitions of one day gaining entry into the A-League.

"I still firmly believe and everyone that I come across in the region believes that we deserve a standalone team. That is what everyone wants, not to just be part of an A-League club," Wolves coach Luke Wilkshire said.

"I would go as far to say that Southern Expansion are not really welcome in Wollongong.”

In a bizarre circumstances, Southern Expansion chief executive Chris Gardiner staged his own media conference outside of WIN Stadium after the MOU announcement. 

He maintained Southern ‘still have an open door’ should the Wolves wish to come to the table and had no issues with their decision to increase pathways for the region’s next generation of players.

Gardiner did question the timing of the Sky Blues move into Illawarra.

He was adamant Southern had played a part in Sydney’s decision. 

"It so happens that there is a focus on development in the Illawarra now from the Sydney club,” he said.

"We are keen and pleased to be the catalyst for football in this region. We are not threatened by it.

“We have never wanted to say that we have exclusive control of a territory."

Sydney FC chairman Scott Barlow said the agreement was merely formalising a relationship that the two clubs have had for many years. 

"It is about formalising that and looking at ways we can take this relationship even further moving forward,” he said. 

"For us, this relationship is about helping Wollongong provide an elite pathway for their most talented young players coming through."

While the agreement would effectively see Sydney FC and Canberra fighting it out for the region’s top talent, Barlow and Wolves director Chris Sheppard were both adamant the agreement would not impact Wollongong’s MoU with the ACT bid. 

"We showed that MOU to Sydney, specifically to [Sky Blues chief executive] Danny Townsend, and they saw no problem with it,” Sheppard said.

“We don't think it interferes whatsoever with our agreement with the ACT and capital bid.”